Oil And Gold Forecast, News and Analysis:
- Home
- Latest Energy News
Oil Prices Steady After OPEC+ Pushes Back Output Hike
Oil prices were trading flat on Thursday afternoon, after OPEC+ delayed its planned output increase by three months to April 2025, and extended the full unwind of production cuts by a year until the end of 2026. Brent crude for February delivery rose a marginal 0.06% to trade at $72.35 per barrel at 14.06 ET, while WTI was trading flat at $68.54.
The OPEC+ announcement comes days after commodity experts at Standard Chartered predicted that the oil ministers were likely to delay any unwinding of voluntary cuts to the end of Q1 and perhaps even further out due to the bearish sentiment that has pervaded oil markets for much of the current year.
‘;document.write(write_html);}
According to StanChart, much of the negative sentiment that has dominated oil markets can be chalked up to misapprehensions about the tapering mechanism for the voluntary cuts made by eight OPEC+ countries. Many traders are worried that the balance of oil demand growth and non-OPEC+ supply growth might not offset the scale of restored OPEC+output, leaving oil markets oversupplied. However, the experts have pointed out that this assumption flies in the face of continued reassurances from OPEC+ members that the tapering would be fully dependent on market conditions rather than being automatic.
‘;document.write(write_html);}else{var write_html=’
ADVERTISEMENT
‘;document.write(write_html);}
Trader focus has been on the question of how many barrels could be returned before a surplus emerged; however, positioning and price dynamics imply that the answer to that question is zero. In a November 3press release, OPEC announced that output increases would be postponed by a month until the start of 2025.
StanChart says the delayed return of more barrels to the market does not necessarily mean that OPEC felt the physical market could not absorb the oil, but rather reflects its awareness that extremely pessimistic 2025 oil balance predictions have viewed the tapering through that lens. StanChart says the latest announcement by OPEC strengthens the case that the pace of tapering will be market-dependent and not automatic as traders fear.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com
- Former GM Manager Takes Helm of Exxon Oil and Gas Business
- Gazprom Hits Maximum Capacity of Pipeline Gas Flows to China
- Goldman Sachs Expects Brent Oil to Average $76 Per Barrel in 2025
Join the discussion | Back to homepage
Source: https://oilprice.com/
More Stories
Fire at Huge California Battery Storage Plant Forces Evacuations
EU, Mexico Sign Trade Deal Ahead Of Trump Inauguration
Petrobras Refinery Output Hit Record High In 2024